GOP candidate Herman Cain is proposing a tax plan he's calling 9-9-9:
9% Federal income tax (deductions only for charitable donations, AND this replaces the payroll tax for SS/Medicare). Cap Gains tax= 0%
9% corporate income tax rate
9% national retail sales tax
Here's a link to the page from Cain's website describing the plan.
Now that Cain has moved to first place (tied with Mitt Romney) in the GOP race according to at least one national poll, I'm guessing this tax proposal will get more attention.
So, would it, or something similar, be good or bad for those in ER? Considerations:
- According to the folks interviewed for this (evenhanded) Christian Science Monitor, the plan would raise about as much revenue as the present tax laws.
- Most of what I've read indicates the tax burden would shift down somewhat (with lower income folks paying more) though I haven't seen quantification of this that seems solid.
- This would appear to be good for businesses and job creation--and for those ER folks who own equities. Just the repatriation of capital that is now being kept overseas by US businesses would be a boon. Reduction of compliance costs would also help businesses, as would the reduction of distortion of capital flows that are caused by sticks and carrots in the present tax code. All good for US business, and those who own stocks, which includes most ER folks..
- The 9% federal sales tax would be a negative for ERees. On the plus side, the reduction of "employer-paid" payroll taxes, tax compliance costs, etc would lower the cost of production quite a bit, so it is possible this would lower prices and offset some of the sales tax.
- Zero tax on cap gains will be a plus for ERees with stocks/bonds in taxable accounts.
As for me, I'm still semi-w*rking (self employed). Ditching the 15% self employment tax would be a very nice thing, and removing the uncertainty of cap gains taxes each year would be a plus. Overall, from a "static analysis" basis think I'd come out about even under this plan--my FIT would go down a bit, but the federal sales tax would probably put me about where I started. If we take into account the positive impact on businesses, I think I'd be ahead.
If we can keep this discussion centered on tax policy as it relates to ER, I think Porky will keep his distance.
9% Federal income tax (deductions only for charitable donations, AND this replaces the payroll tax for SS/Medicare). Cap Gains tax= 0%
9% corporate income tax rate
9% national retail sales tax
Here's a link to the page from Cain's website describing the plan.
Now that Cain has moved to first place (tied with Mitt Romney) in the GOP race according to at least one national poll, I'm guessing this tax proposal will get more attention.
So, would it, or something similar, be good or bad for those in ER? Considerations:
- According to the folks interviewed for this (evenhanded) Christian Science Monitor, the plan would raise about as much revenue as the present tax laws.
- Most of what I've read indicates the tax burden would shift down somewhat (with lower income folks paying more) though I haven't seen quantification of this that seems solid.
- This would appear to be good for businesses and job creation--and for those ER folks who own equities. Just the repatriation of capital that is now being kept overseas by US businesses would be a boon. Reduction of compliance costs would also help businesses, as would the reduction of distortion of capital flows that are caused by sticks and carrots in the present tax code. All good for US business, and those who own stocks, which includes most ER folks..
- The 9% federal sales tax would be a negative for ERees. On the plus side, the reduction of "employer-paid" payroll taxes, tax compliance costs, etc would lower the cost of production quite a bit, so it is possible this would lower prices and offset some of the sales tax.
- Zero tax on cap gains will be a plus for ERees with stocks/bonds in taxable accounts.
As for me, I'm still semi-w*rking (self employed). Ditching the 15% self employment tax would be a very nice thing, and removing the uncertainty of cap gains taxes each year would be a plus. Overall, from a "static analysis" basis think I'd come out about even under this plan--my FIT would go down a bit, but the federal sales tax would probably put me about where I started. If we take into account the positive impact on businesses, I think I'd be ahead.
If we can keep this discussion centered on tax policy as it relates to ER, I think Porky will keep his distance.
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